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HCS CSSB 26(FIN): "An Act relating to an appropriation limit; relating to the budget responsibilities of the governor; relating to the Alaska permanent fund, the earnings of the Alaska permanent fund, and the earnings reserve account; relating to the mental health trust fund; relating to deposits into the dividend fund; relating to the calculation and payment of permanent fund dividends; and providing for an effective date."

00                 HOUSE CS FOR CS FOR SENATE BILL NO. 26(FIN)                                                             
01 "An Act relating to an appropriation limit; relating to the budget responsibilities of the                              
02 governor; relating to the Alaska permanent fund, the earnings of the Alaska permanent                                   
03 fund, and the earnings reserve account; relating to the mental health trust fund; relating                              
04 to deposits into the dividend fund; relating to the calculation and payment of permanent                                
05 fund dividends; and providing for an effective date."                                                                   
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1. AS 37.05.550(b) is amended to read:                                                                   
08            (b)  The legislature may appropriate to the fund money received by the state as                              
09       Alaska marine highway system program receipts or from a settlement or final judicial                              
10 determination of the Dinkum Sands case (United States v. Alaska) and the North                                          
11 Slope royalty case (State v. Amerada Hess, et al.) and not deposited into the Alaska                                    
12 permanent fund under AS 37.13.010(a) [AS 37.13.010(a)(1) OR (2)] or into the public                                 
13       school trust fund under AS 37.14.150.                                                                             
01    * Sec. 2. AS 37.07.020 is amended by adding a new subsection to read:                                              
02 (f)  In addition to the budget and bills submitted under (a) of this section and                                        
03 the fiscal plan submitted under (b) of this section, the governor shall submit a report                                 
04 on how the budget prepared under (a) of this section complies with the appropriation                                    
05       limit set out in art. IX, sec. 16, Constitution of the State of Alaska.                                           
06    * Sec. 3. AS 37.13.010(a) is amended to read:                                                                      
07            (a)  Under art. IX, sec. 15, of the state constitution, there is established as a                            
08       separate fund the Alaska permanent fund. The Alaska permanent fund consists of                                    
09                 (1)  25 percent of all mineral lease rentals, royalties, royalty sale                                   
10 proceeds, net profit shares under AS 38.05.180(f) and (g), and federal mineral revenue                                  
11 sharing payments received by the state from mineral leases [ISSUED ON OR                                                
12 BEFORE DECEMBER 1, 1979], and 25 percent of all bonuses received by the state                                           
13       from mineral leases [ISSUED ON OR BEFORE FEBRUARY 15, 1980]; and                                              
14 (2)  [50 PERCENT OF ALL MINERAL LEASE RENTALS,                                                                          
15 ROYALTIES, ROYALTY SALE PROCEEDS, NET PROFIT SHARES UNDER                                                               
16 AS 38.05.180(f) AND (g), AND FEDERAL MINERAL REVENUE SHARING                                                            
17 PAYMENTS RECEIVED BY THE STATE FROM MINERAL LEASES ISSUED                                                               
18 AFTER DECEMBER 1, 1979, AND 50 PERCENT OF ALL BONUSES RECEIVED                                                          
19 BY THE STATE FROM MINERAL LEASES ISSUED AFTER FEBRUARY 15,                                                              
20       1980; AND                                                                                                         
21 (3)]  any other money appropriated to or otherwise allocated by law or                                                  
22       former law to the Alaska permanent fund.                                                                          
23    * Sec. 4. AS 37.13.140 is amended to read:                                                                         
24 Sec. 37.13.140.  Income and market value.  Net income of the fund includes                                          
25 income of the earnings reserve account established under AS 37.13.145. The                                          
26 corporation shall determine the net [NET] income of the fund [SHALL BE                                              
27 COMPUTED ANNUALLY AS OF THE LAST DAY OF THE FISCAL YEAR] in                                                             
28 accordance with generally accepted accounting principles, excluding any unrealized                                      
29 gains or losses. [INCOME AVAILABLE FOR DISTRIBUTION EQUALS 21                                                           
30 PERCENT OF THE NET INCOME OF THE FUND FOR THE LAST FIVE FISCAL                                                          
31 YEARS, INCLUDING THE FISCAL YEAR JUST ENDED, BUT MAY NOT                                                                
01 EXCEED NET INCOME OF THE FUND FOR THE FISCAL YEAR JUST ENDED                                                            
02 PLUS THE BALANCE IN THE EARNINGS RESERVE ACCOUNT DESCRIBED                                                              
03       IN AS 37.13.145.]                                                                                                 
04    * Sec. 5. AS 37.13.140 is amended by adding new subsections to read:                                               
05 (b)  The corporation shall determine the amount available for distribution each                                         
06 year. The amount available for distribution is 5.25 percent of the average market value                                 
07 of the fund for the first five of the preceding six fiscal years, including the fiscal year                             
08 just ended, computed annually for each fiscal year in accordance with generally                                         
09 accepted accounting principles. In this subsection, "the average market value of the                                    
10 fund" includes the balance of the earnings reserve account established under                                            
11 AS 37.13.145, but does not include that portion of the principal attributed to the                                      
12 settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First                                     
13       Judicial District).                                                                                               
14 (c)  In accordance with AS 37.13.145(b)(2), and subject to appropriation, 33                                            
15 percent of the amount available for distribution under (b) of this section shall be                                     
16 reserved for dividends. The remainder of the amount calculated to be available for                                      
17 distribution under (b) of this section shall be reduced by 80 cents for each dollar by                                  
18 which the amount calculated under (1) of this subsection and the amount under (2) of                                    
19 this subsection if the amount calculated under (1) of this subsection exceeds the                                       
20       amount under (2) of this subsection:                                                                              
21 (1)  the total amount of oil and gas production taxes under                                                             
22 AS 43.55.011 - 43.55.180, mineral lease rentals, royalties, royalty sale proceeds, net                                  
23 profit shares under AS 38.05.180(f) and (g), and federal mineral revenue sharing                                        
24 payments and bonuses received by the state from mineral leases that are deposited into                                  
25       the general fund in the current fiscal year;                                                                      
26 (2)  the sum of $1,400,000,000, adjusted annually for inflation based on                                                
27 a formula provided by the Department of Labor and Workforce Development,                                                
28 reflecting the change from the previous year in the Consumer Price Index for the                                        
29 Anchorage metropolitan area compiled by the Bureau of Labor and Statistics, United                                      
30       States Department of Labor, and rounded to the nearest $10,000,000.                                               
31    * Sec. 6. AS 37.13.140(b), added by sec. 5 of this Act, is amended to read:                                        
01 (b)  The corporation shall determine the amount available for distribution each                                         
02 year. The amount available for distribution is five [5.25] percent of the average market                            
03 value of the fund for the first five of the preceding six fiscal years, including the fiscal                            
04 year just ended, computed annually for each fiscal year in accordance with generally                                    
05 accepted accounting principles. In this subsection, "the average market value of the                                    
06 fund" includes the balance of the earnings reserve account established under                                            
07 AS 37.13.145, but does not include that portion of the principal attributed to the                                      
08 settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First                                     
09       Judicial District).                                                                                               
10    * Sec. 7. AS 37.13.145(b) is amended to read:                                                                      
11 (b)  Each [AT THE END OF EACH] fiscal year, the legislature may                                                 
12 appropriate [CORPORATION SHALL TRANSFER] from the earnings reserve                                                  
13       account to the                                                                                                    
14 (1)  principal of the fund, 0.25 percent of the average market value                                                
15 of the fund for the first five of the preceding six fiscal years, including the fiscal                              
16 year just ended, computed annually for each fiscal year in accordance with                                          
17 generally accepted accounting principles; in this paragraph, "average market                                        
18       value of the fund" has the meaning given in AS 37.13.140(b);                                                  
19 (2)  dividend fund established under AS 43.23.045, 33 [50] percent of                                           
20       the amount [INCOME] available for distribution under AS 37.13.140(b); and                                 
21 (3)  general fund, 67 percent of the amount available for                                                           
22       distribution under AS 37.13.140(b) [AS 37.13.140].                                                            
23    * Sec. 8. AS 37.13.145(d) is amended to read:                                                                      
24 (d)  Income [NOTWITHSTANDING (b) OF THIS SECTION, INCOME]                                                           
25 earned on money awarded in or received as a result of State v. Amerada Hess, et al.,                                    
26 1JU-77-847 Civ. (Superior Court, First Judicial District), including settlement,                                        
27 summary judgment, or adjustment to a royalty-in-kind contract that is tied to the                                       
28 outcome of this case, or interest earned on the money, or on the earnings of the money                                  
29 shall be treated in the same manner as other income of the Alaska permanent fund,                                       
30 except that it is not available for distribution [TO THE DIVIDEND FUND OR FOR                                           
31 TRANSFERS TO THE PRINCIPAL] under (b) [(c)] of this section, and shall be                                           
01       annually deposited into the Alaska capital income fund (AS 37.05.565).                                            
02    * Sec. 9. AS 37.13.145 is amended by adding new subsections to read:                                               
03 (e)  Each year that the balance of the earnings reserve account exceeds four                                            
04 times the amount calculated for appropriations under (b) and (f) of this section, after                                 
05 the appropriations under (b) and (f) of this section, the legislature may appropriate                                   
06       from the earnings reserve account to the principal of the fund the lesser of the                                  
07                 (1)  amount by which the balance of the earnings reserve account                                        
08       exceeds four times the amount calculated for appropriations under (b) and (f) of this                             
09       section; or                                                                                                       
10 (2)  cumulative amount of inflation on the principal of the fund                                                        
11 between the current fiscal year and June 30, 2015, less amounts transferred after                                       
12       June 30, 2015, to the fund to offset the effect of inflation on the principal of the fund.                        
13 (f)  After the appropriations under (b) of this section, but before the                                                 
14 appropriation under (e) of this section, for fiscal years 2018 and 2019, the legislature                                
15 may appropriate from the earnings reserve account an additional amount, if necessary,                                   
16       to provide a dividend of at least $1,250 for each individual.                                                     
17    * Sec. 10. AS 37.13.145(e), added by sec. 9 of this Act, is amended to read:                                       
18 (e)  Each year that the balance of the earnings reserve account exceeds four                                            
19 times the amount calculated for appropriations under (b) [AND (f)] of this section,                                     
20 after the appropriations under (b) [AND (f)] of this section, the legislature may                                       
21 appropriate from the earnings reserve account to the principal of the fund the lesser of                                
22       the                                                                                                               
23 (1)  amount by which the balance of the earnings reserve account                                                        
24 exceeds four times the amount calculated for appropriations under (b) [AND (f)] of                                      
25       this section; or                                                                                                  
26 (2)  cumulative amount of inflation on the principal of the fund                                                        
27 between the current fiscal year and June 30, 2015, less amounts transferred after                                       
28       June 30, 2015, to the fund to offset the effect of inflation on the principal of the fund.                        
29    * Sec. 11. AS 37.13.150 is amended to read:                                                                        
30 Sec. 37.13.150. Corporation budget. The revenue generated by the fund's                                               
31 investments must be identified as the source of the operating budget of the corporation                                 
01 in the state's operating budget under AS 37.07 (Executive Budget Act). The                                              
02 unexpended balance of the corporation's annual operating budget does not lapse at the                                   
03 end of the fiscal year but shall be treated as income and part of the market value of                               
04       the fund under AS 37.13.140.                                                                                  
05    * Sec. 12. AS 37.13.300(c) is amended to read:                                                                     
06            (c)  Net income from the mental health trust fund may not be included in the                                 
07       computation of net income or market value available for distribution under                                    
08       AS 37.13.140.                                                                                                   
09    * Sec. 13. AS 43.23.025 is amended by adding a new subsection to read:                                             
10 (c)  Notwithstanding (a) of this section, the amount of each permanent fund                                             
11 dividend for fiscal years 2018 and 2019 shall be at least $1,250. If the amount of                                      
12 appropriations is not sufficient to provide the dividend amount in this subsection, the                                 
13 commissioner shall reduce the dividend amount under this subsection by an equal                                         
14       amount for each eligible individual.                                                                              
15    * Sec. 14. AS 43.23.055 is amended to read:                                                                        
16            Sec. 43.23.055. Duties of the department. The department shall                                             
17 (1)  annually pay permanent fund dividends from the dividend fund,                                                  
18       without further appropriation;                                                                                
19 (2)  subject to AS 43.23.011 and paragraph (8) of this section, adopt                                                   
20 regulations under AS 44.62 (Administrative Procedure Act) that establish procedures                                     
21 and time limits for claiming a permanent fund dividend; the department shall                                            
22 determine the number of eligible applicants by October 1 of the year for which the                                      
23       dividend is declared and pay the dividends by December 31 of that year;                                           
24 (3)  adopt regulations under AS 44.62 (Administrative Procedure Act)                                                    
25 that establish procedures and time limits for an individual upon emancipation or upon                                   
26 reaching majority to apply for permanent fund dividends not received during minority                                    
27 because the parent, guardian, or other authorized representative did not apply on                                       
28       behalf of the individual;                                                                                         
29 (4)  assist residents of the state, particularly in rural areas, who because                                            
30 of language, disability, or inaccessibility to public transportation need assistance to                                 
31       establish eligibility and to apply for permanent fund dividends;                                                  
01 (5)  use a list of individuals ineligible for a dividend under                                                          
02 AS 43.23.005(d) provided annually by the Department of Corrections and the                                              
03 Department of Public Safety to determine the number and identity of those                                               
04       individuals;                                                                                                      
05 (6)  adopt regulations that are necessary to implement AS 43.23.005(d);                                                 
06 (7)  adopt regulations that establish procedures for the parent, guardian,                                              
07 or other authorized representative of a disabled individual to apply for prior year                                     
08 permanent fund dividends not received by the disabled individual because no                                             
09       application was submitted on behalf of the individual;                                                            
10 (8)  adopt regulations that establish procedures for an individual to                                                   
11 apply to have a dividend disbursement under AS 37.25.050(a)(2) reissued if it is not                                    
12 collected within two years after the date of its issuance; however, the department may                                  
13 not establish a time limit within which an application to have a disbursement reissued                                  
14       must be filed;                                                                                                    
15 (9)  provide any information, upon request, contained in permanent                                                      
16 fund dividend records to the child support services agency created in AS 25.27.010, or                                  
17 the child support enforcement agency of another state, for child support purposes                                       
18 authorized under law; if the information is contained in an electronic data base, the                                   
19       department shall provide the requesting agency with either                                                        
20                      (A)  access to the data base; or                                                                   
21 (B)  a copy of the information in the data base and a statement                                                         
22            certifying its contents;                                                                                     
23                 (10)  establish a fraud investigation unit for the purpose of assisting the                             
24 (A)  Department of Law in the prosecution of individuals who                                                            
25 apply for or obtain a permanent fund dividend in violation of a provision in                                            
26            AS 11, by detecting and investigating those crimes; and                                                      
27 (B)  commissioner to detect and investigate the claiming or                                                             
28 paying of permanent fund dividends that should not have been claimed by or                                              
29 paid to an individual and to impose the penalties and enforcement provisions                                            
30            under AS 43.23.035.                                                                                          
31    * Sec. 15. AS 37.13.145(c) is repealed July 1, 2017.                                                               
01    * Sec. 16. AS 37.13.145(f) and AS 43.23.025(c) are repealed June 30, 2020.                                         
02    * Sec. 17. The uncodified law of the State of Alaska is amended by adding a new section to                         
03 read:                                                                                                                   
04 FISCAL YEAR 2017. Notwithstanding another provision of law, the legislature may                                         
05 appropriate from the earnings reserve account for fiscal year 2017 the amount by which 5.25                             
06 percent of the average market value of the fund for fiscal years 2011, 2012, 2013, 2014, and                            
07 2015, computed annually for each fiscal year in accordance with generally accepted                                      
08 accounting principles, exceeds $695,650,000. In this section, "average market value of the                              
09 fund" includes the balance of the earnings reserve account established under AS 37.13.145,                              
10 but does not include that portion of the principal attributed to the settlement of State v.                             
11 Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First Judicial District).                                        
12    * Sec. 18. The uncodified law of the State of Alaska is amended by adding a new section to                         
13 read:                                                                                                                   
14 RETROACTIVITY. If sec. 17 of this Act takes effect after June 29, 2017, sec. 17 of                                      
15 this Act is retroactive to June 29, 2017.                                                                               
16    * Sec. 19. The uncodified law of the State of Alaska is amended by adding a new section to                         
17 read:                                                                                                                   
18 CONDITIONAL EFFECT. This Act takes effect only if the Thirtieth Alaska State                                            
19 Legislature passes and enacts into law in 2017                                                                          
20 (1)  legislation relating to a broad-based tax, directed to education, that is                                          
21 estimated by the Department of Revenue to generate annually at least $650,000,000, once                                 
22 fully implemented, and that has an effective date not later than January 1, 2019; and                                   
23 (2)  the version of House Bill 111 that passes out of the House of                                                      
24 Representatives.                                                                                                        
25    * Sec. 20. If, under sec. 19 of this Act, secs. 17 and 18 of this Act take effect, they take                       
26 effect immediately under AS 01.10.070(c).                                                                               
27    * Sec. 21. If, under sec. 19 of this Act, sec. 6 of this Act takes effect, it takes effect July 1,                 
28 2019.                                                                                                                   
29    * Sec. 22. If, under sec. 19 of this Act, sec. 10 of this Act takes effect, it takes effect                        
30 June 30, 2020.                                                                                                          
31    * Sec. 23. Except as provided in secs. 20 - 22 of this Act, if, under sec. 19 of this Act, this                    
01 Act takes effect, it takes effect July 1, 2017.